Go lean! Invest! Formula for '09: Merrill group practice pays off as company realizes 20% growth a year.

Author:Alpern, Peter B.
Position:Management strategies - Cover story - Company overview

The phone wouldn't stop ringing and Gary Yackel was actually afraid to answer it. That's how much business was rolling into Merrill Technologies Group back in 1997.

Times were good and a lot of Michigan manufacturers were making money. For more than a decade, the Merrill-based machining, fabrication and systems integration provider had amassed an impressive list of customers. But it was around that time that the company's founder felt the need to diversify his business.

Since its conception in 1968, Merrill Technologies Group, Saginaw, MI, had worked with companies within the automotive industry almost exclusively. But with the building of a new facility and rapid investment in new technology, Yackel initiated his company's venture into new territories: alternative energy, then oil and gas, then aerospace.

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Today, Merrill Technologies Group boasts over $65 million in sales, employs over 400 workers, and has grown by 20 percent in each of the last five years. Over the course of its 40-year history, the company has waded through seismic shifts in the economy and industry, yet somehow not only survived but also expanded. Much of that is a credit to its founder, who reinvested in the company's future, even during the lean years.

A manufacturer doesn't change its stripes easily--especially when its based in the heart of Michigan. But Yackel and Merrill Technologies Group has shown an unusual ability to venture forth into the unknown at opportune times.

"Our philosophy here is that you're either growing or you're dying," said Merrill Technologies Group president Bob Yackel, son of the founder. "You can't just grow to a point, stay there and be satisfied with the customers you have, without continuously investing in your company and expanding. It just doesn't work."

Humble beginnings

Gary Yackel began his career as a toolmaker at Saginaw Steering Systems, back in the days before it became Delphi. He left the Saginaw division and started his own shop doing detail work. His company worked out of a three-room, 3,000sqft facility in Merrill, a modest town offering a modest rent.

"We had a Bridgeport mill, a small lathe, a grinder," Yackel recalled. "During those years, it was just a matter of perseverance. Tough sledding. Basically, you're working on a shoestring."

That first year, Merrill Tool and Machine, as it was called, pulled in $68,000 in business. The next year, that number doubled. Moreover, with another year, it doubled...

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